MOZAMBIQUE – Tongaat Hulett, a JSE-listed sugar processing company headquartered in South Africa is assessing the impact of the recent rains and flood damages on its Mozambique business.
The company has announced that the extent of the damage done to the Mafambisse Estate is minimal while the impact on the Xinavane Estate is yet to be determined.
The company initially invested about US$29.5 million in the Mozambique sugar mills back in 2020.
Tongaat, therefore, acquired 85% of the shares in the Mafambisse company and 88% in Xinavane while the rest of the shares are held by the Mozambican state through IGEPE (Institute for the Management of State Holdings).
This made Tongaat Hulett the biggest private-sector employer in Mozambique.
The company says that further announcements will be made about the impact of the floods once further details and information become available.
This comes as another blow for the group whose south African business is under business rescue.
The company is reported to have been battling with a crippling debt pile that threatened the group’s survival for quite some time, following their shares crashing in the wake of an accounting scandal.
The company, therefore, hired Gavin Hudson as CEO to spearhead a turnaround of the group, a mandate which included a comprehensive review of its finances.
According to them, they intended to leverage Hudson’s longevity and expertise in administrative positions to strategize on reducing the debt burden and turning around governance and operational processes.
Hudson however resigned before accomplishing the task, prompting the appointment of Dan Marokane as acting CEO to help come up with a business rescue plan and help bring the company back on its feet.
The company’s investors are reportedly currently waiting for the publication of the business rescue plan from its business rescue practitioners (BRPs)
The BRPs however keep requesting an extension of the publication of the plan saying that they are not ready and that there are certain milestones the company has scheduled for the middle of the year.
They explained that publishing the plan at this time would not be ideal as it would contain speculation and will not have enough information needed by creditors to make informed decisions regarding doing business with the company.
To help elevate the debt, the company received a ZAR3.2 billion (US$174.6M) offer for its Mozambique sugar operations last year, which they however rejected.
The company is therefore said to have a lot of confidence in the Mozambiquan sugar industry.
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